                                ROANOKE TIMES 
                      Copyright (c) 1997, Roanoke Times

DATE: Thursday, January 23, 1997             TAG: 9701230051
SECTION: BUSINESS                 PAGE: B-5  EDITION: METRO 
DATELINE: WASHINGTON
SOURCE: Associated Press

HOME BUILDING AT 8-YEAR HIGH INFLATION REPORTED AT A STANDSTILL

Builders put up more houses and apartments in 1996 than in any year since 1988, the government said Wednesday, but the pace slowed to an 18-month low in December, partly because of severe storms in the West.

Many analysts expect housing activity to moderate this year, although remaining at a relatively high level.

Meanwhile, a year-end Federal Reserve survey of regional economic activity released Wednesday showed modest overall growth in most parts of the nation with little sign of inflation except for sharply rising energy costs.

``District reports provided scattered evidence of increasing price pressures, particularly for skilled workers, but in general did not indicate significant price pressures other than for energy items,'' reported the survey, known as the beige book because of the color of its cover. The survey, conducted by its 12 regional banks, will be used by central bank officials when they meet Feb. 4-5 to consider monetary policy.

The Commerce Department report said housing starts shot up 8.8 percent in 1996 to 1.47 million, the most since 1988 when foundations were dug for 1.48 million units.

They dropped 7.5 percent in 1995, to 1.35 million, the first decline since a 15.1 percent plunge in 1991 during the recovery from the last recession.

Starts in December fell 12.2 percent to a seasonally adjusted 1.33 million annual rate, lowest since a 1.30 million rate in June 1995. The drop was the steepest since a 16.7 percent fall in January 1994.

Applications for building permits - often a barometer of future activity - slipped 0.6 percent in December, to a 1.41 million rate from 1.42 million in November.

Single-family starts, which had risen 6.7 percent in November, fell back 11.8 percent in December to a 1.02 million rate. For the year, they were up 7.8 percent to 1.16 million. Construction of apartments and condominiums dropped 13.6 percent to a 305,000 rate after shooting up 18.9 percent in November. They jumped 12.9 percent during all of 1996 to 313,500.

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by CNB